Reference no: EM13755156
With the recent changes in healthcare, hospitals have been under increasing pressure to reduce costs. You have been hired by Best Care Hospital to assist in negotiating the 2016contract with the nurses. Based on the terms of the nursing contract, the hospital may need to change the way they charge the various hospital departments. Your job is to advise the hospital onwhether they insist on a contract that allows the hospital to continue with the existing two-level fixed cost system for charging nursing services to the various hospital departments or toaccept a contract that would cause them toswitch to a variable cost system.
You are provided with the following information:
In 2015, the nurses received an average annual salary of $45,000. The hospital holds each department accountable for its financial performance, and it records revenues and expense by departments. Consider the expenses of the pediatrics department in 2015.
Variable expenses (based on 2015 patient days) are as follows:
Variable expenses:
Meals $ 610,000
Laundry $260,000
Laboratory $900,000
Pharmacy $850,000
Maintenance $150,000
Other $530,000
Total $ 3,300,000
Fixed expenses (based on number of beds) are as follows:
Rent $ 3,000,000
General administrative services $2,200,000
Janitorial $200,000
Maintenance $150,000
Other $350,000
Total $ 5,900,000
Management assigns nurses to department on the basis on annual patient-days as follows:
Volume Level in Patient-Days: # Nurses
$10,000-12,000 30
12,001-16,000 35
Total patient-days are the number of patients multiplied by the number of days they are hospitalized. The hospital charges each department for the salaries of the nurses assigned to it.
During 2015, the pediatrics department had a capacity of 60 beds, billed each patient an average of $810 per day, and had revenues of $12.15 million.
(1) Compute the 2015 volume of activity in patient-days.
Biggest challenges facing organizations
: Faculty Note: For students taking this course online, if there is a hardship for any student in being able to secure a microphone to complete this assignment, the student is allowed to use the notes section of PowerPoint to write a narrative of what ..
|
Why does keeping good records help in managing your network
: Prepare a 350 to 1,050 word paper that answers fully discusses the topic questions: Why does keeping good records help in managing your network
|
How many miles long was the ho chi minh trail
: According to the map, about how many miles long was the Ho Chi Minh trail?
|
Importance of the tax file for engagement continuity
: What is the importance of the tax file for engagement continuity? In addition, what role does the staff accountant play in making sure the tax file is useful in future years?
|
Compute the volume of activity in patient-days
: With the recent changes in healthcare, hospitals have been under increasing pressure to reduce costs. You have been hired by Best Care Hospital to assist in negotiating the 2016contract with the nurses. Total patient-days are the number of patients m..
|
Design and develop a database using professional principles
: Your database project must meet the following assessment requirements: Design and develop a database using professional principles and standards.
|
Software for the medical practice
: Select software for the medical practice to handle the practice's requirements. The software should handle front-end and back-end requirements, and may be cloud-based or onsite server-based
|
Management anticipates fixed costs
: Management anticipates fixed costs of $79,000 and variable costs equal to 40% of sales. What will pretax income equal if sales are $335,000?
|
Margin of safety as a percentage of sales
: Hartman Co. has fixed costs of $36,000 and a contribution margin ratio of 24%. If expected sales are $200,000, what is the margin of safety as a percentage of sales?
|